After Some Revamping, Mogl Raises $11M for Nationwide Expansion

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San Diego’s Mogl, founded almost four years ago as a Web-based restaurant loyalty program, has raised an additional $11 million in venture funding.

The startup plans to use the cash to expand beyond its existing market of six cities, which includes San Diego, Los Angeles, and San Francisco, into 14 additional metro areas—including New York, Boston, Houston, and Chicago. The move comes after Mogl revamped its business model and online technology.

Founder Jon Carder started Mogl as an online customer loyalty program for restaurants and bars, and now competes against such companies as San Francisco-based FiveStars, a Y Combinator startup that has raised nearly $43 million, including $26 million in September.

Under Mogl’s initial model, hospitality partners provided a cash-back reward (typically 10 percent) to customers who paid with a credit or debit card that the customer had registered on Mogl’s website. Mogl also “gameified” the program by enabling diners to donate all or part of their cash-back reward to a local food bank. The company made it possible for users to compete against their friends to see who could donate the most meals each month.

In recent interviews with VentureBeat and U-T San Diego, CEO Jon Carder said Mogl worked with Visa, MasterCard, and American Express this year so restaurants could vary the amount of their cash-back reward offers. Restaurants wanted more flexibility in varying the size of their rewards during peak and off-peak hours. (The company did not respond to an e-mail query from Xconomy.)

Mogl made some changes to its business model as well. The company initially took a small percentage of each customer’s tab. Mogl now charges each partner a flat $200 a month per customer—but only if the customer spends at least $200 at the restaurant.

Including the recent funding, Mogl has raised a total of roughly $26 million. Sysco, the multinational food conglomerate based in Houston, TX, became a new investor in the latest round. Existing investors Avalon Ventures, Sigma Partners, Austin Ventures, and Correlation Ventures also participated.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow